Today LIC is launching a new plan called “Wealth Plus”, an unit linked insurance plan (ULIP) having a term of 8 years. As usual, here is my review on this plan with inputs from a development officer working with LIC based in Bangalore. On this blog you can also read about other ULIP products available in the market by various insurance companies. This plan comes with an option of choosing from either of a single premium or 3 years payment term. LIC Wealth Plus plan will be available for three months from 9th February 2010 and the plan closes for sale after those initial three months. There after the funds collected will be invested in equity market, implying that the risk is only medium.

Let us take a look at the salient features of this plan:

Gauranteed return of highest NAV of the first 7 years or the 8th year NAV, whichever is higher.

8 years of Policy term

Either 3 years premium payment term or single premium as per client’s choice.

Minimum single premium of Rs 40,000 and Minimum Yearly premium of Rs 20,000.

Risk cover of 5 times of the annualized premium or 1.25 times of single premium.

In case of death during policy term, the plan returns basic sum assured plus fund value

Age Limit: People in the age group of 10 to 65 years can avail this plan by paying a minimum premium as mentioned above. Maximum premium has no restrictions.

Risk Cover: Policy holder’s risk is covered for a minimum of 1.25 times of the premium paid through single premium mode. The maximum risk cover under single premium for age less than 40 years is 5 times the premium, while the same is 2.5 times if age is below 50 and 1.25 times for ages above 50. Under the regular premium mode the minimum risk cover is 5 times and the maximum cover is 10 times the annual premium for ages below 50 years.

Returns: This plan guarantees to pay the policy holder the higher of the highest NAV reached in the first 7 years of its term or the 8 th year NAV. But this guarantee of highest NAV can only be availed if the policy holder completes the term of the policy and of course, a charge is levied for this guarantee at the rate of 0.35% of the fund value.

The plan comes with an extended life cover for a period of 2 years after end of the term. You can surrender the plan even within three years, but the amount will be only paid after three years from date of the policy as per IRDA restrictions and there are no surrender charges.

As a maturity benefit policy holders are offered the highest NAV for units in the fund, provided the completion of a term of 8 years under the plan. Death benefit equals the sum assured plus the fund value during the term of the policy. For death during the first two years of the plan, and also after the term of the policy during the extended risk cover period the sum assured is only paid as the benefit.

Revival: Instead of charging higher premium for risk cover based on age every year, This plan charges only a level premium based on age at entry. But in the case of revival of a lapsed policy, the age at date of revival is used to arrive at the risk cover premium. Revival can be done only within 2 years from date of lapse and Rs. 500 is charged for revival.

Partial Withdrawals: The plan does provide a feature of partial withdrawals wherein, withdrawals can be after three years from commencement of plan and the maximum withdrawal is restricted to twice in a year. Other condition to be satisfied to make a partial withdrawals is that there should be a minimum of one annual premium left in the fund, and the minimum amount to be withdrawn must not be less than Rs.2000.

Loan Facility: Loan is not granted in this plan as one can avail the same via partial withdrawals. The plan also does not provide for payments of top up premiums.

Charges: * Allocation Charges:Single Premium: 5% up to 4 lakhs and for above 4 lakh the charge is 4.5%.Regular premium: 12% up to 2 lakhs on first year and thereafter 2.5% for remaining years of the policy term. For premium below 4 lakhs the charge is 11.75%, and 11.5% for less than 7 lakhs and above 7 lakhs, the charge would be 11.25%. * Guarantee charges at the rate of 0.35% of the fund value. * Fund management charges at the rate of 1% of the fund value. * Policy administration charge at the rate of Rs 60 monthly for the first year. Rs. 25 for the second year, Thereafter escalates on Rs 25 at the inflating rate of 3% every year. * An accident rider benefit is offered with this plan, by paying Rs.0.50 per thousand risk cover. But the accident raider can only be availed by individual’s within the age of 10 yrs to 62 yrs.

My Take on this policy: There is nothing new offered by LIC through this wealth plus plan except an extended insurance cover for 2 years after the policy term. Though the charges look moderate when compared to similar plans in the market like SBI Life Smart ULIP or Bajaj Allianz Shield Plus, I am basically not in favor of combining insurance with investment. For reaping best benefits always separate out insurance and investment. To get a better idea of what that means, please do read through some of the articles on this blog related to investment. Having said that I request readers to compare and contrast similar ULIP plans wrt various features provided before deciding on buying a policy.

Hello Sir, I already invested in lic wealth plus policy but now I want to surrender this policy of installments all completed in last dec 2012. kindly give me advise about this policy can I withdraw this policy of maturity figure and I how much get maturity figure

Hi Abhishek, I have called out the withdrawal options on this policy in the article details. Please read through. But one question though, why do you want to withdraw if you are okay to share? Any specific reason you want to share to help the readers understand it better?

I, Vethavally, am holding LIC Wealth Plus policy No. 124430570 wef 12 Feb 2010. I wanted this policy for 3 years and it is clearly mentioned in the policy document that due date of my last premium is 12 Aug 2012. I have paid Rs. 60,000/- till now paying @ Rs. 10000/- every half yearly. When I requested to withdraw the money, I am told by Shri KS Pardesi, BM, Narela Branch, New Delhi, that I can get my money only after 5 years i.e. in Feb 2015. And that my amount will be freezed for two years. Could you kindly tell me whether I am entitled to withdraw the money I have invested all these years?

Dear, You are another victim of LIC The big Cheaters of Independent India. LIC always tell you 1000’s of sweet words while taking the policy & kick at your back when you go to surrender etc. And there wealth plus is a universal blunder & there so called dev.officers , agents & higher officials just enjoying life with our money. So think 10000 times before putting your money in LIC & pass this message to all your friends & their friends etc.

Dear sister, As per my experience never invest in any LIC schemes because LIC just advertising wrong information, especially their agents & development officer’s, Branch Manager etc. Their intention is to get the commission so that they will get crorepathy.. Golden club / silver club/ platinum club membership etc.They are just looting our hard earned money & enjoying their life. So what ever happened to you & 1000’s of other poor people’s are a good lesson & NEVER & EVER invest in LIC.

Never Ever Go for LIC Policies They are big cheats. All ULIPS are cheating public money. If you see their Annual Profit Report, they gained good profit. But If you see your ULIP it must be under the purchased Value.

I have invested Rs. 1,00,000/- (Single Premium) during initial opening of the policy in March 2010. What would be the future value of my investment after completion 3 yrs from the date of investment ? Is there any chance to gains much profitable fund from this policy for me? What is the future of this policy considering the present progress graph in April 2013 ? Your opinion please !

Equity related Investments are not a short term. To reap benefit from a equity linked investments You should keep invested for a period of at least 5 to 7 years. This is the best time to invest in equity linked products. Keep invested ……

i have invested in LIC’s Wealth plus in the year 2010. i had paid 40000/- (1st and 2nd due). I heard that it is a share market investment, even i will not get sum assured value after the end of maturity. so plz clarify it. can i check my policy performance and how to know that and which website. plz answer my questions. thank you.

sir, i will buy profit plus policy and will pay 10000 rs in installments for 3 years. and now i will get knowledge about the return of this policy. so tell me locking peroids is now over………and pls tell me wht amount will pay if i will surrender the poilicy

Please remember one thing. The money you earned through your hard work is not for gambling. LIC is a big blunder and peoples like ritesh are their agents who wanted to loot your money. NEVER GO FOR ANY ULIP SCHEMES

hello, i am interested in LIC’s ulip plans n i want to invest it as an insurance policy . i want an insu. policy which should be unit linked policy included low premiums with good Sum assured,D.A.benefit , short term policy (or if long term ..there should have facility of partial withdrow),……plzzzzz help me find in suitable policy for me & give all details of…I have given my details which will helpful for you for this. age :24 yrs. premium capacity :Rs.500/- pm.(6000/- for 1year )can increasable 1/2 thousands. NO for- majour cure-tobacco or any kind of this-physically challenged .

i hope i will get the answer as soon as possible. thanking you…..with warm regards…

dear sir/mam i m from nagpur .i have taken this policy before 2 years.i couldn’t continue after 1st premium of Rs.10,000/-(half yearly) bcoz of fina. problem . so i need my money back earlier…now i want to surrender the policy. i have submitted application attached with all my policy papers(xerox of my i-d prfs ,payment reciepts,policy xerox)after near about 7 months in main branch. Now i want to know when & how much surrender value i will get????????

LIC is just cheating a peope,never invest in lic nor even suggest anyone to invest in Lic.All lic agents are fraud,for huge commission in lic they demolishing the house of innocent people.Ex LIC wealth plus

dear sam and all, here life iunsurance co’s recruiting Every year maximum new promoters, officials, Spouse agents of Govt. Officers, and other agents ( THROUGH THEIR CLOSE RELATIONS!! ). Govt. Officers compelling junior officers to take these plans. High volume of these new Agents by insurance companies, results in maximum losers including hard earned money of poor peoples invested in ULIP schemes. These companies or govt. should make awareness program to the public. All these complaints reveals customer is not aware of the full features of these produt before they purchasing. Agents highliting some benefits & collecting amout throgh their close relations.. Here now life insurance companies stands for promoting Share market not for life cover!!…. I request all to make a survey about the same…

I have invested 20000 in Wealth plus and need to invest 20000 * 2=40000 more in the coming two years as per the policy.Keeping in consideration the low % of return till now from Welath plus NAV should I stop investing any further in the scheme? If I stop investing when and how much money out of the 20000 already paid as 1st installment will I get back?

You will have pay another two premiums to continue availing benefits of this plan. And if you do not pay the remaining two premiums, you will not get a single rupee from the first premium of Rs. 20,000.00 which you have paid.

Any ULIP (Unit Linked Insurance Plan) is a combination of Insurance and Investment. Wealth Plus is no exception. There is a general misconception amongst Investors about ULIP plan, be it LIC or Private Insurance. Do not compare these products with pure investment instruments like Bank FDs, Mutual Funds or any fixed return products. And it is because of the comparison, investor are getting more confused. And even if you compare, you should compare it similar products in the industry. You cannot compare an Apple with a mango or a water-melon. It is because you compare it with Fixed return products like FDs, you feel that your investment into Wealth Plus is not going to get you the desired return. But, don’t forget, that you are getting Insurance cover of Rs. 1 lac for 8 years. Moreover, you will be availing tax benefit every year for 3 years. Your FD is not going to cover your risk nor can you avail tax benefit from it.

Since you have opted for Wealth Plus, stay invested and continue paying the premiums. This policy guarantees highest NAV over a period of 7 years and you will be paid the Fund Value (Highest NAV X Total no. of units) at the end of the 8th year. If you withdraw after 3 years, you may end up on the loosing side. Moreover, your risk cover will stop; which is Sum Assured Plus Fund Value, which is a very strong feature of Wealth Plus. For any product to perform requires a minimum of 5 years time period. And even in conventional plan which assumes Surrender Value after paying first 3 yearly premiums, the Surrender Value will be about 33% of the total premium paid for three year; i.e Rs. 20,000.00 in your case. And, if you compare it with ULIPs, it may even be more, who knows?

So, don’t worry about your investment, stay invested for 8 years and you will certainly get around 10-12% return from this plan.

rply 2 mr. pradip i m not satisfied with ur answer …. “You will have pay another two premiums to continue availing benefits of this plan. And if you do not pay the remaining two premiums, you will not get a single rupee from the first premium of Rs. 20,000.00 which you have paid.” What do u mean???as u said if we are not able to countinue other premiums that means we should forget our invested money ??? this is wrong sir. this is CHEATING. its our hard earned money. how can we…..?there is no flexibility in this policy to get money back???? Now i think also LIC is also cheating innocent & poor people. now where should we go? “AB TO LIC PE BHI BHAROSA NAHI RAHA !!!”

Hi, I had the same doubt and got it clarified by one of the advisors in LIC. I was told that after 3 years, if the policy is surrendered, I would get the money based on the day’s (the day that you initiate surrender) NAV. But if I am willing wait to complete the date of expiry of the policy term (8 years), we would get the money based on the highest NAV obtained in the total number of years invested. In the end, I was told the truth that Wealth Plus and 2 more (don’t remember the names) didn’t perform the way expected (not sure if that is the truth). I only invested 40,000 in 2010. Completed 3 years and the current value is only 36700.